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As cryptocurrency continues to take off, more and more official organizations are getting involved. One of the most intriguing government-backed cryptocurrencies is Sango Coin. This cryptocurrency from the Central African Republic (CAR), the first African country to launch a native crypto, has been met with some controversy.
Is it a great investment, or is it a poor decision that will bankrupt the country? Explore our guide to understanding Sango Coin's history as we see whether it's a viable crypto option.
Sango Coin is a cryptocurrency backed by the Central African Republic’s resources. The crypto offers many features, including digital citizenship programs, metaverse land ownership and tokenization of natural resources.
The Central African Republic is a landlocked African nation in the middle of Africa that already uses other cryptocurrencies as official currency. They now plan on adding Sango Coin to their roster. Sango Coin will be the native crypto of the Sango project. It’s backed by a Bitcoin reserve and governed by Central African Republic citizens. Every citizen is able to vote on crypto proposals and shape the future of the coin. Sango Coin comes with many potential applications, including day-to-day purchases, crypto coin trading and virtual economy investments.
Sango Coin is just the latest part of the Central African Republic's plan to revolutionize the country's banking system. In April 2022, the nation made headlines for adopting Bitcoin as legal tender. A few months later, on July 3, 2022, the nation announced that they’re launching a national cryptocurrency. The coin is named "Sango" after one of the nation's official languages. It officially launches in mid-July.
This move toward crypto is part of the nation's plan to revitalize its economy and promote financial inclusion with a next-generation currency. As Central African Republic President Faustin-Archange Touadéra explained during the Sango Genesis’ event, roughly 57% of the nation's residents don't belong to a bank. The nation mostly consists of smaller towns with little infrastructure, so most people cannot easily travel to a physical bank. Their banking system is made more complicated by the fact that regional instability and poor exchange rates tend to scare away reputable international banks. This has led to a lot of financial isolation, and many citizens are unable to do things like make online purchases or invest retirement funds safely.
Therefore, the Central African Republic has been making a huge push toward a crypto-based economy. Supporters like President Touadéra believe that cryptocurrency could provide a safer way for citizens to store and use their funds. They hope that people who were previously unable to use anything besides cash will be able to use Sango Coin for everyday purchases. The coin is mostly meant to be used, not traded, but some of the region's economic experts also say they hope Sango Coin will attract global crypto investors. Overall, the government states that crypto will help them break away from traditional economic structures that have failed to work with their unique culture.
Keep in mind that this plan has been met with some skepticism. Nine out of 10 people in the Central African Republic don’t have access to the internet. MP Jean Galvanis Ngassiyombo, part of the National Assembly economic and planning commission, says that the country plans to install a public fiber-optic network by the end of 2023. The Central African Republic has already signed deals with the nearby nation of Cameroon, and they appear to be well on track with their goals. Ultimately, Sango Coin will only be viable if the government keeps its promise to get all residents internet access.
To help ensure it has many applications, Sango comes with several helpful features. The crypto has a confidential layer, so it can be both secure and private. It also allows smart contracts, so it's useful for various sales and transactions. An integrated accounting system with an app will make it easy to keep track of coins.
As a form of national currency, Sango Coin has some unique perks for users. It’s exempt from capital gains taxes that other forms of crypto face. Users also don’t have to pay taxes on any transactions that take place over a cryptocurrency exchange. The crypto is legally recognized for paying all forms of debt and taxes. These CAR-specific features may cause higher-than-usual rates of adoption among CAR citizens.
Sango Coin also has some unique links to other projects run by the Central African Republic. As part of the Sango Project, they plan to create a Crypto Island in the nation's capital. Located in the CAR capital city of Bangui, Crypto Island plans to use metaverse real estate to improve physical infrastructure. Sango Coin will also be used to help tokenize various national assets, allowing investors all over the world to invest in the nation's mining and export industries.
When Sango Coin is first generated, the government plans to offer 20% of the coin in public sales. People who buy these coins will have the option of locking the coins for a set amount of time. By holding onto the coins instead of immediately selling them, they’ll receive multiple benefits, listed below.
Those who lock Sango are allowed to apply for citizenship with the Central African Republic. In addition to making it easier to obtain actual citizenship, you also automatically get citizenship in the Sango metaverse. This can give you additional advantages and fewer fees when investing in the CAR's Crypto Island.
When you lock Sango Coin, you get to join the very first e-residency program to exist in the metaverse. Being an e-resident is mostly important for tax and government purposes. In addition, e-residents will be able to avoid paying any cryptocurrency taxes. They’ll also be able to vote on various proposals that help to determine policies for Crypto Island.
Each user who locks their Sango Coin will get a real plot of land. The ownership of this land will translate to a real plot within Crypto Island as well. This land is represented in a one-to-one ratio, meaning your real land will directly correspond to your virtual land.
So far, little has been released about the actual tokenomics of Sango Coin. The Central African Republic’s government has mostly been interested in discussing their "big picture" plans with the world, so we don't know much about how the coin will actually operate. For instance, there isn't much information available about how the coin is generated or how its value will fluctuate.
From current documentation, it’s clear that the Sango Coin is linked to Bitcoin. The government plans on using a Bitcoin reserve to back the value of the Sango Coin itself, and Sango will be connected to a Bitcoin sidechain. The other central fact we know about Sango is that it will be based on blockchain technology.
The Sango project is just starting out, but there are already quite a few details on the government's plans for its future. According to their proposal, they have a clear road map with three different stages.
The Central African Republic started the building blocks of legalizing crypto when they announced that Bitcoin would be legal tender. In the next legislative quarter, they hope to enact more bills formalizing the role crypto plays in their economy. This includes updating laws to allow new avenues for citizenship and land transfer.
Setting up this crypto has been an enormous digital undertaking. To help provide infrastructure for the project, the government has launched programs to provide nationwide internet coverage and build a National Bitcoin Treasury. The next stage of their plan is to work on testing a Bitcoin sidechain that allows seamless communication between the two crypto branches.
One of the main reasons the government has been such a huge proponent of crypto is because they believe it can have real-world applications. They plan on using the Crypto Island location to launch physical infrastructure for the nation. Their first initiative will aim to improve transportation infrastructure.
The Sango project is very optimistic, so it's already generating a lot of excitement. In the world of crypto, this tends to be a good thing. High amounts of press lead to more demand, which leads to higher prices. Investors who get in at the early stages will have a lot of different opportunities for how to handle their Sango Coin. The initial interest in the coin and Crypto Island may offer some interesting chances to make a profit.
However, we'd recommend exercising some caution when investing with Sango Coin. A lot of the coin's success depends on the government's ability to turn average citizens into crypto users. This may prove tricky, because the Central African Republic has experienced high levels of instability and corruption. Compared to some other parts of Africa, they’ve suffered human rights violations, as well as misappropriation of government funds. This could derail the nationwide fiber optic plans that are critical to Sango Coin's long-term viability. These issues are problematic enough that the World Bank has formally stated that they will not support the project.
Ultimately, investors are likely to be better off just treating Sango Coin like any other temporarily popular crypto. The more conceptual features, such as tokenizing national resources and building a deregulated national finance system, may not work out — so investing vast sums in long-term strategies is probably a risky move.
The idea of a crypto coin fully backed by a country's resources is exciting. However, Sango Coin is still in its early stages. The government has used a lot of trendy buzzwords, but it's hard to tell whether their promises will pay off. Unless they can actually improve the country's internet services, we won't get to see Sango Coin's more unique features in action. Until then, it's likely to create a briefly trendy crypto bubble without staying power.